Statoil discovers oil in Bay du Nord prospect near St. John’s

CALGARY – Norway’s Statoil ASA said Tuesday it has found oil in its Bay du Nord prospect 500 kilometres northeast of St. John’s on Canada’s East Coast.

Statoil said it is assessing the discovery, which is a joint venture with Husky Energy Inc. located under 1,100 metres of water roughly 20 kilometres south of another prospect called Mizzen. Mizzen, discovered in 2010, may hold between 100 million and 200 million barrels of oil, Statoil estimates.

“The success of Bay du Nord is the result of an ambitious and targeted drilling campaign in the Flemish Pass Basin,” Tim Dodson, Statoil’s executive vice-president of exploration, said in a statement. “This discovery is very encouraging.”

No resource estimate was given for Bay du Nord, but it marks the second prospect uncovered by Statoil this year offshore Newfoundland and Labrador.

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In June, the company said it struck oil at another joint venture with Husky called Harpoon. Statoil said it plans to conduct further appraisal drilling in the offshore basin.

Newfoundland produced roughly 197,000 barrels per day of undersea crude in 2012, down from 266,000 barrels a year earlier.

The province is eager to reverse declining production by attracting more players to the offshore.

In recent months, provincial Energy Minister Tom Marshall has met with officials from China’s CNOOC Ltd. and Sinopec in a bid to drum up interest.

Crown-owned Nalcor Energy is also shopping results of new seismic data in the Labrador Sea to prospective investors.

ExxonMobil Corp., the world’s biggest energy company, said earlier this year it would move forward with its $14-billion Hebron development in the North Atlantic. The U.S. oil major said the project would yield 150,000 barrels of oil a day beginning in 2017.

Hebron, a 700 million barrel prospect discovered in 1980, is located in Newfoundland’s Jeanne d’Arc Basin. It is the fourth major development offshore Newfoundland. The province owns a 4.9% interest in the scheme. The other partners include Chevron Corp., Suncor Energy Inc. and Statoil.